Get-together has been in the wind for a while

Early this month, the new deputy of the
Australian Securities Exchange
,
Peter Hiom
, dined under the graceful arches of the Musée d’Orsay in Paris. Seated alongside him were representatives from 68 stock exchanges from around the world, all of them in Paris for the annual meeting of the World Federation of Exchanges.

As the blur of recent mergers suggests, exchanges like to get together. However, ASX has long held a candle for Singapore.

The current merger negotiations have been under way for less than a month, stretching back to about the same time as that Paris conference. But the courtship goes back many years, even beyond the current management led by
Robert Elstone
in Australia and Magnus Bocker in Singapore.

The most recent attempt by the two to get together was in about 2007. The ASX had been exploring tie-ups with the Toronto Stock Exchange, New York Stock Exchange, London Stock Exchange and Deutsche Börse, but talks with the Singapore Exchange (SGX) got the furthest.

Delicate issues such as who would be chief executive and whether the operation would be based in Singapore or Sydney were still to be worked out. But then the global financial crisis hit and mergers between exchanges everywhere were put on hold.

Mr Elstone’s contract as ASX chief is due to end in July next year. His announcement at the annual general meeting last month that he would not seek to renew his contract would have made the ASX board especially interested in anything SGX had to say.

ASX chairman
David Gonski
is well known around Singapore, being on the board of Singapore Airlines. The airline’s CEO, Chew Choon Seng, is finishing up at the end of the year and will become the chairman of SGX in January.

Mr Elstone and Mr Bocker are well known to each other. In the mid-2000s Mr Bocker had direct management of running relations with both the ASX and the Sydney Futures Exchange (SFE), which at the time was run by Mr Elstone.

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ASX has used Nasdaq’s software for its trading platform since the 1990s. While Mr Elstone was running the SFE, Mr Bocker was helping him build his derivatives clearing platform and bond depository system.

The ASX board met yesterday and further meetings are planned for today. An announcement is expected this afternoon.

But negotiations between the respective boards are likely to be the easy part. Once the deal is announced, the hard work to get the Australian and Singaporese governments on board will begin.